2018 was, without a doubt, another extraordinary year for US employers. The #MeToo movement continues to have a tremendous impact on the workplace. In addition, the thorny issue of how to manage contractor classifications in the gig economy continued to evolve and new DOJ enforcement activity is heightening concerns about no-poaching agreements and other antitrust activity. In 2019, employers will confront a host of new laws in 2019 on topics ranging from sick leave, lactation accommodation, salary history inquiries and much more.

Our 2018/2019 Digest is a fantastic resource to help you navigate the changes ahead and chart your course for 2019.

In the wake of the #HeForShe movement, California recently became the first US state to require companies to put female directors on their corporate boards.

Supporters of the law make a convincing business case for gender diversity, citing rigorous research findings showing companies where women are represented at board or top-management levels are also the companies that perform best financially. Beyond the business case however, there is also a sense that increased representation is critical to discussions and decisions affecting corporate culture and ensuring workplace respect and dignity.

Now is the time to focus on building a strong corporate culture of equality and respect. California is advancing a trend started in Australia and a number of European countries in recognizing the importance of gender-balanced corporate boards. Germany, Italy and the Netherlands all have initiatives in place to boost corporate board representation.

Baker McKenzie is uniquely positioned to guide companies in developing globally compliant corporate diversity and inclusion initiatives, including board compliance issues. Click here for more information on board level D&I initiatives around the globe, and how we can help.

Alyssa Milano tweeted #MeToo just about one year ago. Since then, we’ve seen unprecedented attention on sexual harassment in the workplace and a number of high profile individuals have been taken to task.

For employers, the spotlight, viral encouragement to come forward and public scrutiny is translating to an outpouring of claims and lawsuits. Indeed, in September 2018, the EEOC reported a surge in sexual harassment filings–more than a 50percentincrease in suits challenging sexual harassment over FY 2017.

For all the change ahead, we’ll start with what’s not changing: Governor Jerry Brown vetoed a bill that would have prohibited California employers from using mandatory arbitration agreements. In vetoing AB 3080, Governor Brown said it violated the Federal Arbitration Act and recent U.S. Supreme Court decisions by creating impermissible restrictions on arbitration agreements.

Now, here are six new laws that will undoubtedly change the landscape for California employers:

Employers with five or more employees must provide anti-sexual harassment prevention training to ALL California employees.

Current law requires all employers with 50 or more employees to provide two hours of sexual harassment prevention training only to supervisors.

Now training is mandated for all employers with five or more employees—including seasonal and temporary employees—by January 1, 2020.

Within six months of assuming their positions (and once every two years thereafter), all supervisors must receive at least two hours of training, and all non-supervisory employees must receive at least one hour.

The new law also directs the Department of Fair Employment and Housing (DFEH) to develop online training courses on the prevention of sexual harassment in the workplace. The DFEH must make the online courses available on its website, and is further required to make the courses available in English, Spanish, Simplified Chinese, Tagalog, Vietnamese, Korean and any other language that is spoken by a “substantial number of non-English-speaking people.” Employers are permitted to direct employees to the DFEH’s training courses or may develop their own.

In terms of content, the training requirements are not otherwise changed from existing law. (That is, training must include information and practical guidance regarding the federal and state statutory provisions concerning the prohibition against and the prevention and correction of sexual harassment and the remedies available to victims of sexual harassment in employment. The training and education must also include practical examples aimed at instructing supervisors in the prevention of harassment, discrimination, and retaliation, and shall be presented by trainers or educators with knowledge and expertise in the prevention of harassment, discrimination, and retaliation.)

No more confidentiality clauses in settlements relating to sexual harassment, sex discrimination and retaliation claims.

Beginning January 1, 2019, any provision in a settlement agreement that prevents the disclosure of factual information relating to certain claims of sexual assault, sexual harassment, or harassment or discrimination based on sex, that are filed in a civil or administrative action is void as a matter of law. The law does not appear to apply to clauses used in settlements occurring in the pre-litigation phase (that is, prior to filing an administrative charge or judicial complaint).

SB 820 allow for provisions that shield the identity of the claimant, including all facts that could lead to the discovery of his or her identity. Importantly, it also allows the parties to make confidential the amount paid in settlement of a claim.

Expanded definition of harassment under the Fair Employment and Housing Act and other changes to how claims of sexual harassment are proven in court.

Beginning January 1, 2019, SB 1300 significantly expands liability under the FEHA. (The FEHA is the primary California statute protecting employees, interns, volunteers, applicants, or persons providing services pursuant to a contract from discrimination, retaliation and harassment in employment based on protected categories, like race, religion, sex, gender, and sexual orientation, among others. It applies to all employers with 5 or more employees.) SB 1300 expands an employer’s potential FEHA liability for acts of nonemployees to all forms of unlawful harassment (removing the “sexual” limitation).

By expressly affirming or rejecting certain judicial decision, SB 1300 will impact how sexual harassment claims are litigated in the future.

It affirms language from Justice Ruth Bader Ginsburg’s concurrence in Harris v. Forklift Systems that, in a workplace harassment suit, “the plaintiff need not prove that his or her tangible productivity has declined as a result of the harassment. It suffices to prove that a reasonable person subjected to the discriminatory conduct would find, as the plaintiff did, that the harassment so altered working conditions as to make it more difficult to do the job.”

It prohibits reliance on Judge Alex Kozinksi’s Ninth Circuit opinion in Brooks v. City of San Mateo to determine what conduct is sufficiently severe or pervasive to constitute actionable harassment under FEHA.

It affirms reliance on the California Supreme Court’s rejection of the “stray remarks doctrine” in Reid v. Google, Inc. because the “existence of a hostile work environment depends on the totality of the circumstances and a discriminatory remark, even if made not directly in the context of an employment decision or uttered by a non-decision maker, may be relevant, circumstantial evidence of discrimination.”

It disapproves of reliance on Kelley v. Conco Companies to support different standards for hostile work environment harassment depending on the type of workplace.

It affirms the observation in Nazir v. United Airlines, Inc. that “hostile working environment cases involve issues ‘not determinable on paper.'”

SB 1300 prohibits employers from requiring employees to sign (as a condition of employment, raise, or bonus): (1) a release of FEHA claims or rights or (2) a document prohibiting disclosure of information about unlawful acts in the workplace, including non-disparagement agreements.

SB 1300 prohibits a prevailing defendant from being awarded attorney’s fees and costs unless the court finds the action was frivolous, unreasonable, or groundless when brought or that the plaintiff continued to litigate after it clearly became so.

SB 1300 authorizes (but does not require) employers to provide bystander intervention training to its employees.

Waivers to testify are banned.

Beginning January 1, 2019, SB 3109 renders void and unenforceable any provision in a contract or settlement agreement that waives a party’s right to testify in a legal proceeding (if required or requested by court order, subpoena or administrative or legislative request) regarding criminal conduct or sexual harassment on the part of the other contracting party, or the other party’s agents or employees.

A method to collect data on the prevalence of sexual harassment in the IHSS program.

Takeaways

Expect to experience more and more employees coming forward with their own stories–there is no sense in denying this national reckoning. Empower employees to speak out within to avoid resorting to hashing things out publically on social media. Establish a multichannel complaint process that allows employees to bring complaints to management and HR, not to just one individual. Reinforce a strong policy against retaliation so that employees can come forward without fear of reprisal. Ensure prompt, thorough and fair review of complaints. There are times when it will be prudent to delegate the investigation to a third-party; consult with counsel to make this determination.

Training employees to recognize, respond to, and report harassment is essential. Work with counsel to do an inventory and audit of all trainings and workplace policies related to the prevention and reporting of sexual harassment and retaliation. Implement tracking to ensure all employees receive timely training. Maintain and retain training records. Consider working with outside counsel to provide training to all of your California employees on a periodic, rolling basis.

Ontario’s revised regulatory framework for cannabis is now in effect. Bill 36, the Cannabis Statute Law Amendment Act, 2018, received Royal Assent and came into force on October 17, 2018, amending 18 provincial statutes including the Cannabis Act, 2017 (now the Cannabis Control Act, 2017 ) and the Smoke-Free Ontario Act, 2017 (SFOA 2017).

Prior to Bill 36, recreational cannabis and medical cannabis were to be regulated separately, and consuming recreational cannabis in a “workplace” or “public place” (both broadly defined and not limited to enclosed areas) was to be entirely prohibited. Bill 36 effectively eliminates the distinction between recreational cannabis and medical cannabis for the purposes of regulating public consumption (among other things).

To help employers adjust to the new reality of legalized cannabis, we outline below key aspects of the new legislation.

What is permitted

Smoking of cannabis, whether recreational or medical, is effectively permitted in locations where tobacco smoking or use of electronic cigarettes is permissible under the SFOA 2017, such as sidewalks, public outdoor spaces, parks, etc.

What is prohibited

The SFOA 2017 expressly prohibits:

Smoking of cannabis, whether recreational or medical, in enclosed workplaces, enclosed public spaces and designated buildings, subject to certain exemptions for controlled areas in certain residential care facilities, hospices, designated guest rooms in hotels, motels and inns, and scientific research and testing facilities; and

Consuming cannabis in any manner in a vehicle or boat, whether by the driver or passenger.

The meaning of “enclosed” is defined as any premises covered by a roof. Enclosed workplaces include places or vehicles where employees work or frequent in the course of their employment, even if they aren’t working at the time. Enclosed public spaces are where the public is invited or permitted access. Schools, child care centers, any indoor areas of condominiums and residences, and reserved seating areas of sports and entertainment venues also fall under prohibited areas.

Employer obligations

Employers are required to:

Ensure that no one smokes or holds lighted tobacco or cannabis, or uses an electronic cigarette, in an enclosed workplace or other area over which the employer exercises control;

Ensure that anyone who refuses to comply with the smoking prohibition does not remain in the enclosed area;

Post prescribed signs respecting the smoking prohibition; and

Remove ashtrays or similar equipment from the enclosed workplace.

Failure to comply with the above requirements may result in a fine of up to $100,000 for a first offense or $300,000 for subsequent offenses.

No reprisals

Employers may not dismiss or threaten to dismiss, discipline or suspend, impose any penalty, or intimidate a worker because they are in compliance with, or sought enforcement of the SFOA 2017.

Substance testing

Substance testing policies are not impacted by the new legislation and are only permissible in limited circumstances.

Key takeaways

Employers can continue to expect that employees need to show up sober and ready to perform their duties. However, employers should nonetheless consider whether their workplace policies capture the employer’s expectations with regard to issues such as:

Employee use of recreational cannabis during and prior to work (and at company-sponsored events); and

Smoking prohibitions in or around the workplace (and at company-sponsored events).

The employer’s policies will need to clearly define any prohibitions the employer intends to enforce. Such policies need to be drafted as soon as possible, since legalization is now here, and should be reviewed by legal counsel prior to implementation.

Please reach out to your Baker McKenzie employment lawyer for more details.

]]>https://www.theemployerreport.com/2018/10/its-high-time-ontario-finally-passes-its-cannabis-and-smoke-free-legislation/feed/0You’re Invited! Asia Pacific Employment Law Update | October 16 In LA & October 17 In Palo Altohttps://www.theemployerreport.com/2018/10/youre-invited-asia-pacific-employment-law-update-october-16-in-la-october-17-in-palo-alto/
https://www.theemployerreport.com/2018/10/youre-invited-asia-pacific-employment-law-update-october-16-in-la-october-17-in-palo-alto/#respondWed, 10 Oct 2018 20:17:45 +0000https://www.theemployerreport.com/?p=3530Continue Reading…]]>Please join us for a complimentary breakfast briefing in Los Angeles on October 16 and in Palo Alto on October 17 to study new employment law updates from Asia Pacific.

Baker McKenzie’s employment law attorneys from Australia, China, Hong Kong, the Philippines, Singapore and Taiwan are coming to California to translate the recent trends, make sense of new laws and break down the hot topics facing US multinational employers operating in those countries today. Topics include:

California just became the first state to require companies to put female directors on their boards.

“Given all the special privileges that corporations have enjoyed for so long, it’s high time corporate boards include the people who constitute more than half the ‘persons’ in America,” Governor Jerry Brown wrote in signing Senate Bill 826 into law on September 30. The legislation appears sparked by recent debates around sexual harassment, workplace culture and gender equality, and it comes less than one year after Brown signed the state’s salary history ban.

The new law requires publicly traded corporations headquartered in California to include at least one woman on their boards of directors by the end of 2019 as part of an effort to close the workplace gender gap.

However, should the law survive any possible constitutional challenges, here’s what it does:

All publicly traded companies (whether incorporated in California or not, whether domestic or foreign) whose principal executive offices (according to the corporation’s SEC 10-K) are in California must have a minimum of one female on its board of directors by December 31, 2019;

By December 31, 2021, the required minimum increases to 2 female directors if the corporation has 5 directors, or to 3 female directors if the corporation has 6 or more directors (if the board has 4 or fewer directors, the corporation shall have a minimum of one female director);

The Secretary of State will publish reports on its web site documenting the compliance of covered corporations.

Penalties

For failure to timely file board member information with the Secretary of State, the Secretary of State may impose a fine of $100,000;

For a first violation, a corporation may be fined $100,000;

For a second or subsequent violation, the penalty is $300,000.

Each director seat required to be held by a female, which is not held by a female during at least a portion of a calendar year, counts as a violation. A female director having held a seat for at least a portion of the year is not a violation.

Giving Women a Seat at the Table: The Europeans Are Already There

California’s new law is in line with the broader, worldwide trend of governments, institutions and shareholders paying close attention to the gender gap in pay, participation and leadership. The international response to the gender pay gap takes different forms in different jurisdictions. As we’ve written previously, some countries (e.g. Germany and the UK) have focused efforts on transparency and the gender pay gap, requiring employers to report data about the difference in average pay between women and men. Others have been proactive in requiring companies to increase gender diversity on boards long before California set this new law in motion.

Though the US has no federal requirement for female representation on boards, and no other US state has legislation similar to California’s, several European countries endorsed board quotas years ago. In 2007, Norway was the first country to pass a law requiring 40 percent of corporate board seats be held by women, and Germany set a 30 percent requirement in 2015. Spain, France and Italy have also set quotas for public firms.

We expect that California’s new mandate will accelerate the diversification of boardrooms in this state and beyond. For assistance in developing your company’s compliance strategy, please reach out to your Baker McKenzie employment lawyer.

]]>https://www.theemployerreport.com/2018/10/california-becomes-first-state-to-mandate-female-board-of-directors/feed/0California Supreme Court Affirms Broad And Liberal Construction Of Workers’ Compensation Exclusivity Provisionhttps://www.theemployerreport.com/2018/08/california-supreme-court-affirms-broad-and-liberal-construction-of-workers-compensation-exclusivity-provision/
https://www.theemployerreport.com/2018/08/california-supreme-court-affirms-broad-and-liberal-construction-of-workers-compensation-exclusivity-provision/#respondThu, 30 Aug 2018 16:01:18 +0000https://www.theemployerreport.com/?p=3416Continue Reading…]]>This month the California Supreme Court reaffirmed that workers’ compensation laws are the exclusive remedy for an employee’s injuries. In King v. CompPartners, the Court ruled that an employee’s tort claims against a utilization review company and a doctor performing a mandatory utilization review were preempted. In so doing, the Court reminded employees that the Court construes the Workers Compensation Act (WCA) liberally and broadly, in favor of awarding workers’ compensation, not in permitting civil litigation.

Background

This case arose after an employee sustained a back injury at work and suffered a series of seizures after abruptly stopping Klonopin (a psychotropic drug to treat anxiety and depression) when a utilization reviewer (defendant Dr. Sharma) concluded Klonopin was medically unnecessary. The employee alleged that work-related back pain caused anxiety and depression. His mental health professional prescribed Klonopin. As part of the utilization review process outlined in Labor Code section 4610 (the process where employers, through utilization reviewers, determine whether a recommended treatment plan for an industrial injury is medically necessary), Dr. Sharma denied the treatment recommendation.

The employee filed a complaint in superior court claiming negligence, infliction of emotional distress and other tort claims against Dr. Sharma and the utilization review company, CompPartners. He alleged that the Dr. Sharma caused him additional injuries by denying the request without providing a weaning regimen or warning him of the possible side effects of abruptly ceasing the medication. Defendants demurred, arguing that the WCA preempted the employee’s tort claims The trial court agreed and sustained the demurrer without leave to amend.

The Court of Appeal affirmed, except as to the failure to warn theory, which the court concluded was not subject to the WCA’s exclusive remedies because it did not directly challenge Dr. Sharma’s medical necessity determination.

The Supreme Court’s Decision

The California Supreme Court agreed with the lower courts that the employee’s injuries caused by the utilization review are the sort of injuries the WCA’s exclusivity provision covers. However, the Court disagreed with the appellate court’s determination that the WCA did not apply to the extent that the employee complained Dr. Sharma failed to warn of the adverse consequences of abruptly stopping the medication.

The Supreme Court concluded the appellate court erred, because the employee’s injury arose out of and in the course of the utilization review — “a statutorily required part of the workers’ compensation claims process, to which he would not have been subject had he not suffered a work-related injury.”

Court’s ruling resulted from the application of two principles favorable to employers:

The WCA’s exclusive remedy provision preempts injuries that are collateral to or derive from a compensable workplace injury, including additional or aggravated injuries that stem from conduct occurring in the workers’ compensation claim process. Because the employee’s injuries occurred within the scope of the employment relationship—i.e., from errors in the utilization process that his employer had to establish as part of the claim process—the compensation the employee received for his workplace back injury was his sole and exclusive remedy under Labor Code section 3602.

The WCA’s exclusivity provision protected CompPartners and Dr. Sharma because they stood in the shoes of the employer. Though a literal reading of the WCA’s definition of “employer” seemingly excluded them, the Court reasoned that the Act, properly interpreted, also preempts claims against utilization reviewers because they discharge the employers’ responsibilities to their employees. In so doing, the Supreme Court expanded the list of third parties entitled to protection from tort claims based on a compensable workplace injury.

In sum, this case illustrates the fundamental public policy rationale behind the exclusivity provision. The Court explained:

The treatment of utilization reviewers is, however, consistent with the basic trade off that underlies the workers’ compensation system as a whole: The employee is afforded swift and certain payments for medical treatment without having to prove fault, but, in exchange, gives up his right to sue in tort for those injuries that result from risks encompassed by the employment relationship.”

Please reach out to your Baker McKenzie employment lawyer with any questions.

]]>https://www.theemployerreport.com/2018/08/california-supreme-court-affirms-broad-and-liberal-construction-of-workers-compensation-exclusivity-provision/feed/0California Clarifies Its Salary History Ban, Making It Easier For Employers To Complyhttps://www.theemployerreport.com/2018/08/california-clarifies-its-salary-history-ban-making-it-easier-for-employers-to-comply/
https://www.theemployerreport.com/2018/08/california-clarifies-its-salary-history-ban-making-it-easier-for-employers-to-comply/#respondMon, 06 Aug 2018 20:04:21 +0000https://www.theemployerreport.com/?p=3379Continue Reading…]]>Since January 1, 2018, California law has prohibited employers from asking applicants about their salary history. Earlier this month, Governor Jerry Brown signed AB 2282 into law to clarify several aspects of the salary history ban.

The original law added Section 432.3 to the California Labor Code. As a reminder, Section 432.3 prohibits employers from relying on the salary history of an “applicant” as a factor in determining whether to offer the applicant employment or what salary to offer the applicant, except in specified circumstances. Section 432.3 also prohibits employers (and their agents) from seeking salary history information orally or in writing, including information about compensation and benefits. Finally, Section 432.3 requires employers, upon “reasonable request,” to provide the “pay scale” for a position to an applicant applying for that position.

Since the ban’s enactment, employers have struggled to interpret some aspects of the statute. For example, employers did not have clear guidance on the meaning of “applicant” or “reasonable request.”

AB 2282 clarifies some of these unanswered questions:

“Pay scale” means a salary or hourly wage range, and not other forms of compensation such as equity or bonus compensation.

“Reasonable request” means a request made after an applicant has completed an initial interview with the employer. Consequently, employers do not have to provide pay scale information to applicants until after they have completed their first interview.

“Applicant” or “applicant for employment” means an individual who is seeking employment with the employer and is not currently employed with that employer in any capacity or position. The legislation therefore clarifies that the salary history ban and pay scale requirements do not apply to internal applicants or transfers.

Employers may ask an applicant his or her “salary expectation” for the position applied for. However, employers must still avoid inquiries that might be construed as pressuring an applicant to disclose salary history.

For further information about salary history bans in California and across the country, please contact the Baker McKenzie attorney you work with or any one of our employment lawyers.